Medicare improperly paid $580 million for psychotherapy care in the first year of the pandemic, including $348 million for telehealth services, according to an audit by the Department of Health and Human Services Office of the Inspector General. The audit included over 13.5 million psychotherapy services provided from March 2020 to February 2021. The OIG estimated that Medicare paid $1 billion for psychotherapy that year, with $580 million in improper payments. The OIG recommended that CMS work to recover improper payments, implement system edits to prevent improper billing and provide education for providers to ensure Medicare requirements are met.
The COVID-19 pandemic has had a significant impact on healthcare systems worldwide, and the United States is no exception. The pandemic has forced healthcare providers to adopt telehealth services, leading to a significant increase in telehealth utilization. As a result, the Centers for Medicare and Medicaid Services (CMS) has temporarily expanded telehealth coverage to ensure patients have access to care during the pandemic. However, according to a recent audit by the Department of Health and Human Services Office of the Inspector General (OIG), Medicare improperly paid for $580 million of psychotherapy care, including $348 million of telehealth services, during the first year of the COVID-19 public health emergency. This paper aims to examine the OIG’s findings, including the causes of improper payments, the implications of the audit, and the OIG’s recommendations for CMS.
Background
The OIG conducted an audit of Medicare payments for psychotherapy services provided from March 2020 through February 2021. The audit included more than 13.5 million psychotherapy services, and the agency estimated that Medicare paid for $1 billion of psychotherapy during that year. The OIG chose two stratified random samples of psychotherapy services during the period: one group of 111 enrollee days for telehealth and another sample of 105 enrollee days for in-person care.
The OIG found that for 128 of the 216 total sampled enrollee days, providers did not meet Medicare requirements. For example, in 60 sampled enrollee days, psychotherapy time was not documented, and in 43 enrollee days, treatment plans were incomplete or missing. In addition, in 54 sampled enrollee days, providers did not meet Medicare documentation and billing guidance, like forgetting provider signatures or not specifying whether services were telehealth or in-person care.
According to the OIG, an enrollee day includes all claim lines for Medicare Part B psychotherapy with the same service start date for a particular enrollee. Medicare paid $35,560 for the 128 sampled enrollee days where providers did not meet requirements. Based on that sample, the OIG estimated that providers received $580 million in improper payments out of the $1 billion that Medicare paid for psychotherapy that year.
Implications
The OIG’s findings have significant implications for Medicare beneficiaries, providers, and the CMS. The improper payments identified by the OIG mean that Medicare beneficiaries may not have received the quality of care they needed or were entitled to receive. Improper payments may also lead to increased healthcare costs for beneficiaries, which could be detrimental to their health and well-being.
For providers, improper payments may lead to financial loss, reputational damage, and legal repercussions. In addition, providers who did not meet Medicare requirements may have provided substandard care, which could harm patients.
For CMS, the OIG’s findings highlight the need for stronger oversight mechanisms for psychotherapy services. The CMS must ensure that payments for psychotherapy services meet Medicare requirements and that providers meet documentation and billing guidance. Failure to do so could result in significant financial losses for Medicare and harm patients’ health and well-being.
Recommendations
The OIG recommended that CMS work with contractors to recover the $35,560 in improper payments from the sample, implement system edits for psychotherapy services to prevent payments for improper billing, and add educational services for providers so they meet requirements. The OIG also recommended that CMS establish adequate oversight mechanisms, such as conducting medical reviews of psychotherapy services and making providers aware of educational materials on billing and documentation for these services, to ensure that Medicare pays only for psychotherapy services that meet Medicare requirements.
